A Note on Relative Efficiency of State Transport Undertakings in India During 2000s

The main aim of this study is to analyze the level of relative efficiency of State Transport Undertakings (STUs) in India during 2000s. The analysis is based on estimation of a translog cost function using fixed effects model of the panel data method. In the context of this study, the prime advantage associated with this method is that it allows the cost function to be estimated by taking into account the variables peculiar to each STU. We find that, on an average, smaller STUs are more efficient than their larger counterparts. It seems that there is inverse relationship between ranking based on efficiency measures and size. We also found that the STU, which operates with larger route length per bus is more likely to experience a higher level of efficiency. Furthermore, a higher level of utilization of buses and their capacity would lead to a higher level of efficiency in STUs